The euro jumped against the dollar immediately after the Spanish bond auction results. The markets reacted positively when the results showed that the Spanish Treasury sold more than expected amount, however the yields were higher than the previous auction of similar paper. This disappointed markets and euro was immediately sold off again.
The Spanish government sold 2.54 billion euros worth of bonds dated 2014 and 2022, which was above the target range 1.5 billion to 2.5 billion euros. This was good news, however what caused concern in the markets was that the borrowing costs overall have risen compared to the prior auction, with the 10-year bond yield rising to 5.74 percent versus the prior 5.403 in the January auction of similar paper.
EURUSD briefly spiked some 27 pips to 1.3164 from 1.3137 around 08:40 GMT but soon eased slightly. EURUSD is currently trading at 1.3137 at around 09:30 GMT and remains steady, also due to a successful French bond auction.
Meanwhile, France also held a bond auction shortly after the Spanish auction. The French Treasury sold 7.97 billion euros of government bonds, which was near the top end of its planned range of 7 billion to 8 billion euros.